The state's ethics agency dismisses a complaint filed by the California Democratic Party over the since canceled deal that was signed days before the governor took office in 2003.

SACRAMENTO — The state's ethics enforcement agency has found no wrongdoing in its review of a complaint made four years ago against Gov. Arnold Schwarzenegger in connection with a consulting contract he reached with a muscle magazine publisher days before he took office in 2003.

The Fair Political Practices Commission, in a letter earlier this month, told a lawyer for the Republican governor that the complaint filed by the California Democratic Party is now closed.

The contract with American Media Inc. was estimated to be worth up to $8 million over five years. It began in January 2004, but Schwarzenegger canceled the contract after financial details were disclosed in newspaper reports in mid-2005.

"I have no problem about the money, but my wife has a little problem with that," Schwarzenegger told the Associated Press at the time, referring to California First Lady Maria Shriver. "She thinks it means less diamonds or something like that."

Under the deal, Schwarzenegger was guaranteed a minimum of $1 million a year over five years based on a percentage of advertising in seven magazines published by American Media's subsidiary, Weider Publications.

The former bodybuilding champion was to "further the business objectives" of the subsidiary, and served as executive editor for two of its muscle magazines, publishing a monthly column in each.

Democratic Party officials complained on July 19, 2005, that the governor improperly took gifts; violated prohibitions on writing articles for money; violated state conflict-of-interest laws by vetoing legislation that would have imposed restrictions on the supplement industry, which advertised in the magazines; and failed to report a payment he had arranged from the publisher to a charity.

In its letter, the ethics commission did not explain its decision to dismiss the complaint, or why the review took four years.

"They made the ruling; that's accepted, of course," said Democratic Party Chairman John Burton, who was not a party official four years ago.

The issue was "like old news," he said, adding, "I'm sure the governor is sleeping more soundly at night."